SOUTHEAST MISSOURI STATE UNIVERSITY OMB CIRCULAR A-133 SINGLE AUDIT REPORT JUNE 30, 2012

Transcription

1 SOUTHEAST MISSOURI STATE UNIVERSITY OMB CIRCULAR A-133 SINGLE AUDIT REPORT JUNE 30, 2012

2 Contents Page Independent Auditors Report On Internal Control Over Financial Reporting And On Compliance And Other Matters Based On An Audit Of Financial Statements Performed In Accordance With Government Auditing Standards Independent Auditors Report On Compliance With Requirements That Could Have A and Material Effect On Each Major Program And On Internal Control Over Compliance In Accordance With OMB Circular A-133 And On The Schedule Of Expenditures Of Awards Schedule Of Expenditures Of Awards Notes To Schedule Of Expenditures Of Awards Schedule Of Findings And Questioned Costs Schedule Of Prior Audit Findings... 15

3 Independent Auditors Report On Internal Control Over Financial Reporting And On Compliance And Other Matters Based On An Audit Of Financial Statements Performed In Accordance With Government Auditing Standards Board of Regents Southeast Missouri State University Cape Girardeau, Missouri We have audited the financial statements of Southeast Missouri State University (the University) as of and for the year ended June 30, 2012, and have issued our report thereon dated October 17, We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Internal Control Over Financial Reporting Management of the university is responsible for establishing and maintaining effective internal control over financial reporting. In planning and performing our audit, we considered the University s internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the University s internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the University s internal control over financial reporting. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the University s financial statements will not be prevented, or detected and corrected on a timely basis.

4 Board of Regents Southeast Missouri State University Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identity all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. Compliance And Other Matters As part of obtaining reasonable assurance about whether the University s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. This report is intended solely for the information and use of the Board of Regents, management, others within the University and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. October 17, 2012 Page 2

5 Independent Auditors Report On Compliance With Requirements That Could Have A And Material Effect On Each Major Program And On Internal Control Over Compliance In Accordance With OMB Circular A-133 And On The Schedule Of Expenditures Of Awards Board of Regents Southeast Missouri State University Cape Girardeau, Missouri Compliance We have audited Southeast Missouri State University s (the University) compliance with the types of compliance requirements described in the U. S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that could have a direct and material effect on each of its major federal programs for the year ended June 30, The University s major federal programs are identified in the summary of auditors results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major federal programs is the responsibility of the University s management. Our responsibility is to express an opinion on the University s compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the University s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of the University s compliance with those requirements. In our opinion, the University complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, However, the results of our auditing procedures disclosed an instance of noncompliance with those requirements which is required to be reported in accordance with OMB Circular A-133 and which is described in the accompanying schedule of findings and questioned costs as item Page 3

6 Board of Regents Southeast Missouri State University Internal Control Over Compliance Management of the University is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts and grants applicable to federal programs. In planning and performing our audit, we considered the University s internal control over compliance with requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance, and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the University s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. Our consideration of the internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, we identified a deficiency in internal control over compliance that we consider to be a significant deficiency as described in the accompanying schedule of findings and questioned costs as item A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. The University s response to the finding identified in our audit is described in the accompanying schedule of findings and questioned costs. We did not audit the University s responses and, accordingly, we express no opinion on it. Page 4

7 Board of Regents Southeast Missouri State University Schedule of Expenditures of Awards We have audited the financial statements of the University as of and for the year ended June 30, 2012, and have issued our report thereon dated October 17, 2012, which contained an unqualified opinion on those financial statements. Our audit was performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying Schedule of Expenditures of Awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the basic financial statements as a whole. This report is intended solely for the information and use of the Board of Regents, management, others within the entity, and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. November 13, 2012 (except for paragraph 8 which, is dated October 17, 2012) Page 5

8 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS CFDA Grantor/Pass-Through Grantor Program Or Cluster Title Grant Number Number Expenditures National Science Foundation: PBL Network 12 DBI $ 29,748 MAA Conference 12 DMS Summer Program in Green Chemistry OISE ,737 ARRA-Research Lab Renovation CHE ,837 Total National Science Foundation $ 250,124 United States Department of Agriculture: Passed through Missouri Department of Health and Senior Services Child and Adult Care Food Program UCEC Food Program ERS $ 32,455 SAHEC Food Program ERS ,010 Total Child and Adult Care Food Program 48,465 Rural Business Enterprise Grants - Operation Restart ,418 Total United States Department of Agriculture $ 79,883 United States Department of Transportation: Passed through Missouri Department of Transportation Transit Capital Investment Grants Formula Grants for Other Than Urbanized Areas - Shuttle Services 2012 MO-18-X $ 136,000 Mini Shuttle Buses 2012 MO-18-X ,915 Multi Modal Transfer & Buses MO Total United States Department of Transportation $ 212,549 United States Department of Education: Student Financial Aid Cluster Supplemental Educational Opportunity Grant Program P007A $ 256,200 Work Study Program P033A ,776 Pell Grant Program P063P ,611,684 Loan Program P268K ,175,258 Academic Competitiveness Grant P375A National Science and Mathematics Access P376S Perkins Loan Program ,213 Teacher Education Assistance for College and Higher Education Grants P379T ,914 Total Student Financial Aid Cluster 63,197,320 See the accompanying notes to schedule of expenditures of federal awards. Page 6

9 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (Continued) CFDA Grantor/Pass-Through Grantor Program Or Cluster Title Grant Number Number Expenditures Trio Cluster Student Support Services 2011 P042A $ 43,585 Student Support Services 2012 P042A ,216 Student Support Services Supplement 2012 P042A ,412 McNair Post-Baccalaureate Achievement P217A ,114 McNair Post-Baccalaureate Achievement P217A ,433 Total Trio Cluster 503,760 Gaining Early Awareness and Readiness for Undergraduate Programs - Gear Up Programs 2011 P334A ,456 Passed through Missouri Department of Higher Education College Access Challenge Grant Program - Prep and PAS ,356 Passed through Missouri Department of Elementary and School Improvement Grants Cluster Secondary Education ARRA School Turnaround Program ,812 Passed through University of Missouri - Columbia ARRA - MU Turnaround Schools 2012 C ,865 Total School Improvement Grants Cluster 101,677 Passed through Missouri Department of Higher Education Improving Teacher Quality State Grants Boosting Bootheel Math ,212 Higher Education _ Institutional Aid - Title III Strengthening Institutions P031A ,645 Higher Education _ Institutional Aid - Title III Strengthening Institutions P031A ,410 Total Higher Education - Institutional Aid 847,055 Fund for the Improvement of Postsecondary Education Technology Upgrades 2011 P116Z ,217 Technology Upgrades Kent Info Commons P116Z ,509 Total Fund for the Improvement of Postsecondary Education 383,726 Total United States Department of Education $ 65,354,562 See the accompanying notes to schedule of expenditures of federal awards. Page 7

10 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (Continued) CFDA Grantor/Pass-Through Grantor Program Or Cluster Title Grant Number Number Expenditures Delta Regional Authority Delta Area Economic Development DRA Post Flood 12 MO $ 70,718 DRA Accelerated Entre in the Delta MO ,321 Total Delta Area Economic Development 134,039 Passed through The University of Alabama Delta Regional Development Delta Leadership ,971 Delta Leadership ,394 USDA RCAP Operation Jump Start RW ,699 USDA RBOG Red Delta Communities Phase II RW ,288 Total Delta Regional Development 93,352 Passed through the U.S. Department of Agriculture USDA Rural Business Opportunity Grants ,137 Total Delta Regional Authority $ 260,528 National Aeronautical and Space Administration Aerospace Education Services Program MO NASA Education Program - Project F NNX10AH94G $ 339,963 National Endowment for the Arts Promotion of the Arts - Creating Music $ 7,554 Small Business Administration Passed through University of Missouri - Columbia Small Business Development Center SBDC Portable Assistance SBAHQ $ 47,765 SBDC 2012 E ,078 SBDC ,104 Total Small Business Development Center 127,947 SBA Rebitalizaing Rural Communities SDBAHQ-09-I ,747 Prime Technical Assistance Program Delta MDC 2011 SBAQ-10-Y ,197 SBA Delta MDC 2012 SBAHQ-10-Y ,183 SBA Growth Start 2012 SBAHQ-10-Y ,410 Growth Start 2011 SBAQ-10-Y ,254 Total Prime Technical Assistance Program 275,044 Total Small Business Administration $ 573,738 See the accompanying notes to schedule of expenditures of federal awards. Page 8

11 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (Continued) CFDA Grantor/Pass-Through Grantor Program Or Cluster Title Grant Number Number Expenditures United States Department of Health and Human Services Rural Health Outreach Special Initiative Rural Health Outreach Special Initiative 2011 D1ARH $ 66,906 Rural Health Outreach Special Initiative 2010 D1ARH ,375 Total Rural Health Outreach Special Initiative 163,281 Advanced Education Nursing Traineeships Adv Ed Nursing Traineeships 2011 A10HP ,098 Adv Ed Nursing Traineeships 2012 A10HP ,812 Total Advanced Education Nursing Traineeships 26,910 Passed through Missouri Department of Mental Health Passed through Southeast Missouri Area Agency on Aging Block Grants for Prevention and Treatment of Substance Abuse Southeast Regional Support Center SDA420P ,417 Special Programs for the Aging - Title III, Part B - Grants for Supportive Services and Senior APPLE Paperwork Project AAA Special Programs for the Aging - Title III, Part B - Grants for Supportive Services and Senior APPLE Paperwork Project AAA ,823 Total Special Programs for the Aging 14,906 Passed through Southeast Missouri Area Agency on Aging National Family Caregiver Support, Title III, Part B - AAA SA Eldercare ,384 Passed through Missouri Department of Health and Senior Services Center for Disease Control and Prevention, Investigation and Technical Assistance Mosquito Surveillance ,319 Passed through Missouri Department of Elementary and Child Care and Development Block Grant Cluster Secondary Education CDA Training CDA Training ,000 Passed through Missouri Department of Health and Senior Services ARRA - Environmental Asthma Trigger Training in Schools AOC ,811 Total Child Care and Development Block Grant 132,998 Total United States Department of Health and Human Services $ 453,215 Department of Homeland Security Pass through State of Missouri Emergency Management Pre-Disaster Mitigation Grant - Generator EMK-2008-PD $ 383,106 United States Department of Housing and Urban Development Rural Housing and Economic Development - HUD Construction $ 28,296 United States Department of Justice Forensics Laboratory DD-BX $ 3,237 Grants to Reduce Domestic Violence, Dating Violence, Sexual Assault, and Stalking - Victory WA-AX ,224 Total United States Department of Justice $ 59,461 See the accompanying notes to schedule of expenditures of federal awards. Page 9

12 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (Continued) CFDA Grantor/Pass-Through Grantor Program Or Cluster Title Grant Number Number Expenditures United States Department of Labor WIA Pilots, Demonstrations, and Research Projects - DOL Entrepreneurship Training Initiative EA A $ 46,983 Institute of Museum and Library Sciences Passed through Missouri State Library Grants to States - Confluence and Crossroads 2011-LSD1-DIGC1C $ 70,863 United States Department of Commerce United States Department of Energy Passed through University of Missouri - Columbia United States Environmental Protection Agency Public Telecommunications Facilities Planning and Construction Generator N $ 105,159 Energy Efficiency and Renewable Energy Information Dissemination, Outreach Training and Technical Assistance MO Industrial Assess 12 C $ 1,044 Surveys, Studies, Research Activities Related to the Clean Water Act Asthma in Home 2011 XA $ 12,038 United States Fish and Wildlife Service State Wildlife Grants - Insect Survey $ 7,974 Total Expenditures of Awards $ 68,247,040 See the accompanying notes to schedule of expenditures of federal awards. Page 10

13 NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS June 30, Basis Of Presentation The accompanying Schedule of Expenditures of Awards (the Schedule) presents the activity of all federal awards programs of Southeast Missouri State University (the University) for the year ended June 30, For the purpose of the Schedule, federal awards include grants, contracts, loans, and loan guarantee agreements entered into directly between the University and agencies and departments of the federal government or passed through other government agencies or other organizations. 2. Basis Of Accounting And Relationship To The Financial Statements financial assistance revenues from the Work Study, the Pell Grant Program and the Supplemental Educational Opportunity Grant programs are reported in the University s financial statements as federal grant revenues. The activity of the Loan Program is not included in the University s financial statements, as the benefits of this program are awarded directly to students and not to the University. Amounts reported in the accompanying Schedule are presented using the accrual basis of accounting, which is described in Note 2 to the University s financial statements. Related federal financial reports are prepared on the cash basis of accounting. 3. Loan Programs The following schedule represents loans advanced by the University for the year ended June 30, 2012: CFDA Advances Student Financial Aid: Department of Education: Loans $ 47,175,258 Perkins Loans ,213 The above advances are included as federal expenditures in the Schedule. Page 11

14 SCHEDULE OF FINDINGS AND QUESTIONED COSTS Section I - Summary Of Auditors Results Financial Statements Type of auditors report issued: Unqualified Opinion Internal control over financial reporting: Material weakness(es) identified? yes X no Significant deficiency(s) identified that are not considered to be material weakness(es)? yes X none reported Noncompliance material to financial statements noted? yes X no Awards Internal control over major programs: Material weakness(es) identified? yes X no Significant deficiency(s) identified that are not considered to be material weakness(es)? X yes none reported Type of auditors report issued on compliance for major programs: Unqualified Opinion Any audit findings disclosed that are required to be reported in accordance with section 510(a) of Circular A-133? X yes no Identification Of Major Programs: Student Financial Aid Cluster CFDA # U.S. Department of Education - Supplemental Educational Opportunity Grant Program CFDA # U.S. Department of Education - Work Study Program CFDA # U.S. Department of Education - Perkins Loan Program CFDA # U.S. Department of Education - Pell Grant Program CFDA # U.S. Department of Education - Loan Program CFDA # U.S. Department of Education - Academic Competiveness Grant CFDA # U.S. Department of Education - National Science and Mathematics Access CFDA # U.S. Department of Education - TEACH Grants TRIO Cluster CFDA # U.S. Department of Education - Student Support Services CFDA # U.S. Department of Education - McNair Post-Baccalaureate Achievement CFDA # National Aeronautical and Space Administration - Science Grants CFDA # U.S. Department of Education - Fund for the Improvement of Postsecondary Education - Technology Upgrades CFDA # Department of Homeland Security - Pre-Disaster Mitigation Grant Dollar threshold used to distinguish between type A and type B programs: $300,000 Auditee qualified as low-risk auditee? X Yes no Page 12

15 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Section II - Financial Statement Findings None Noted Section III - Award Findings And Questioned Costs Finding No Award Information: Student Financial Aid Cluster CFDA No: , , , , , , , Criteria: Condition: Questioned Costs: Regulations require the institution to notify the student or parent when the institution credits the student s account with Loan, FFEL, Perkins Loan, or TEACH Grant Program Funds. This notification must include the anticipated date and amount of the disbursement, the student s or parent s right to cancel all or a portion of the loan/disbursement, and the procedures and time by which the student/parent must notify the institution of desire to cancel the loan/disbursement. The notification must be sent no earlier than 30 days before, and no later than 30 days after, crediting the student s account at the institution if affirmative confirmation is obtained from the student or no earlier than 30 days before, and no later than 7 days after, crediting the student account at the institution if affirmative confirmation is not obtained from the student. Of the 40 students selected for student file testing, it was determined that the 6 students that received TEACH Grant Program Funds did not receive notification that TEACH funds were credited to his/her account. This occurred due to the Student Financial Aid Handbook providing vague guidelines regarding which programs the University is required to send notification to the student when a disbursement is made. The Handbook clearly states that such notifications are sent for all Loan and Perkins disbursements. However, notification is also required for any TEACH grant disbursements, as stated in of the Regulations, but this is not clearly stated in the Handbook. As such, the University was unaware that disbursement notifications were required for disbursements from this program, and thus were not sent. None Page 13

16 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause: Effect: Recommendation: Corrective Action Plan: The University was unaware that the disbursement notification requirement extended to awards disbursed out of the TEACH grant program. The University is not in compliance with TEACH grant notification requirements. We recommend that the University send disbursement notification letters to all TEACH Grant recipients as required by federal regulations. Additionally, we recommend that the University revise its Student Financial Aid policies and procedures surrounding the distribution of disbursement notification letters to include students receiving TEACH grant disbursements in order to ensure that similar errors do not occur in future years. The University concurs with the finding and is taking steps for corrective action. The University will modify the software used to generate disbursement letters to include all disbursements coded to the TEACH grant. The University believes that this process addition will ensure that disbursement notifications are appropriately sent to all TEACH grant recipients. Completion Date: December 31, 2012 Contact Person And Title: Karen Walker, or of Student Financial Aid Page 14

17 SCHEDULE OF PRIOR AUDIT FINDINGS Finding No Condition: For 1 student out of 40 selected for recalculation of benefits, it was determined that an incorrect cost of attendance was being used to calculate the student s financial need. This occurred because the cost of attendance budget for in-state, on-campus students incorrectly included the transportation costs applicable to in-state, off-campus students. This resulted in an overaward of the student s subsidized loan. The student s loans were reallocated to unsubsidized so that the student was not overawarded; however, this condition was found to impact more than just the student selected. The University identified all students impacted by the error by running a query of all students with an on-campus residence hall address but a cost of attendance incorporating off-campus transportation costs. Where possible, the loans of affected students were reallocated from subsidized to unsubsidized to correct this error. However, even after this reallocation took place, it was determined that $43,015 in subsidized loans had been overawarded to students where reallocation was not possible. Status: The University added two steps to its current review procedures to assist in mitigating errors in future years. First, all professional level staff in the Financial Aid area are reviewing the budget set-up form in the Financial Aid management system (Banner) at the time budgets are established annually. This allowed five additional staff members to review the budgets and budget components prior to assigning budgets to individual student records. Secondly, Financial Aid is randomly reviewing student award notifications prior to printing to assure that budgets are consistent with student residency and living plans. The University believes these two controls will assure that the correct budgets and amounts are assigned to students prior to sending award notifications and processing aid payments. Additionally, the University has contacted the Department of Education regarding the overawarding of $43,015 in subsidized loans, and has taken appropriate corrective action based on this consultation. Page 15